How much to Call Me?

In­ven­tor must now squeeze pay­ment out of Vo­da­com, and his cor­po­rate in­vestors are ex­pect­ing a big pay­day

CityPress - - Business - DE­WALD VAN REN­SBURG de­wald.vrens­burg@city­press.co.za

Nkosana Makate, the in­ven­tor of the Please Call Me, will fi­nally sit down to talk money with Vo­da­com af­ter be­ing cheated for 16 years. A Con­sti­tu­tional Court rul­ing this week ended a pro­tracted le­gal bat­tle by Makate to be paid for the con­cept he de­vel­oped in 2000 while work­ing as a ju­nior ac­coun­tant at the cel­lu­lar be­he­moth.

Back then, he asked for a 15% share in rev­enue if the con­cept worked. His re­quest was never ac­ceded to.

By now, that 15% would amount to an astro­nom­i­cal R10.5 bil­lion based on es­ti­mates pro­duced in the case by Makate’s team.

That is the rev­enue re­lated to the “in­duced” phone calls af­ter peo­ple re­ceive Please Call Me mes­sages as well as the ad­ver­tis­ing that is in­cluded in these mes­sages.

In prac­tice, Vo­da­com might seize on the fact that Makate had later asked for R500 mil­lion to set­tle the mat­ter in 2007, be­fore be­ing re­buffed and launch­ing the court case.

It is not just Makate who will be push­ing for a ma­jor pay­day.

His case was funded all the way from the high court by Ster­ling Rand, a Sand­ton-based “debt in­vest­ment” com­pany that also funds court cases.

Ster­ling Rand will now be paid a cut of what­ever Vo­da­com set­tles for with Makate, giv­ing it ev­ery in­cen­tive to spend more money on an ag­gres­sive ne­go­ti­a­tion.

“Ne­go­ti­a­tions will be led by our le­gal team un­der in­struc­tion,” said Ster­ling Rand’s Errol Els­don.

“Mr Makate will be guided by the team. We nat­u­rally have a vested in­ter­est in the out­come since ... we will re­ceive a por­tion of the pro­ceeds,” he said by email in re­sponse to ques­tions.

In his judg­ment this week, Jus­tice Chris Jafta ac­cused Makate and Ster­ling Rand, as well as Vo­da­com, of le­gal overkill.

Makate and Vo­da­com both had four coun­sel for the case.

In Makate’s cor­ner, three of them were se­nior coun­sel (SC) or “silks”, the most highly paid ad­vo­cates.

Even while crit­i­cis­ing Vo­da­com harshly through­out the judg­ment, the court made the com­pany pay for only half of the Makate team, com­plain­ing that the team was un­nec­es­sar­ily heavy-hit­ting.

“Two is­sues were raised in the main. Nei­ther ren­ders the cir­cum­stances so ex­cep­tional as to jus­tify em­ploy­ment of more than two coun­sel,” says the rul­ing.

Ac­cord­ing to Els­don, Ster­ling Rand de­cided on the ap­point­ment of the le­gal team.

“We adopt a ‘belt and braces’ pol­icy, hence the ap­point­ment of three SCs for the Concourt,” he said, adding that they “only re­tain the best coun­sel in the coun­try”.

Ster­ling Rand usu­ally sets aside an amount for a case plus an ap­peal.

In Makate’s case, they mo­bilised more money from their UK-based in­vestors. “Their ap­petite for in­vest­ment, if re­quired, is cer­tainly whet­ted by a ma­jor suc­cess such as the one we have just had,” said Els­don. The court case was not a dam­ages claim – it was a bid to make Vo­da­com recog­nise a ver­bal con­tract that Makate had made with the com­pany’s head of prod­uct de­vel­op­ment, Phil Geissler, in 2000. Geissler had told him that if the Please Call Me turned out to be a vi­able prod­uct, Makate’s re­ward would be ne­go­ti­ated later. Geissler told him that if they couldn’t agree on Makate’s re­ward, it would be up to the CEO to de­cide on it. The rul­ing this week turns the mat­ter into a court or­der that Vo­da­com ne­go­ti­ate a sum “in good faith” and, if that fails, to have Vo­da­com CEO Shameel Joosub ar­bi­trate as a “dead­lock-break­ing mech­a­nism”. The irony was not lost on the judges. “While choos­ing the CEO may not be re­garded as a del­e­ga­tion of power to a third party ... it is how the par­ties in their wis­dom for­mu­lated the rel­e­vant clause,” reads the rul­ing penned by Jafta. The rul­ing over­turned the high court’s find­ing on two le­gal points while ac­cept­ing the high court’s orig­i­nal find­ings on the fact that Makate did in fact in­vent the Please Call Me.

DOESN’T RING TRUE

For­mer Vo­da­com CEO Alan Knot­tCraig used to claim that he per­son­ally in­vented the Please Call Me, and he even de­tailed this “eureka mo­ment” in his au­to­bi­og­ra­phy. The high court dis­missed his ver­sion as “non­sen­si­cal” in 2013, even while it re­jected Makate’s case on tech­ni­cal le­gal grounds. This week, the Con­sti­tu­tional Court poured more scorn on Knott-Craig for his bla­tant fab­ri­ca­tion. Knott-Craig even got Geissler, the ex­ec­u­tive who orig­i­nally promised to ne­go­ti­ate a re­ward with Makate, to lie for him in writ­ing dur­ing the high court trial. This was to con­firm Knott-Craig’s story of inventing the Please Call Me while ob­serv­ing two Vo­da­com se­cu­rity guards try­ing to com­mu­ni­cate by us­ing missed calls. By fight­ing Makate in the Con­sti­tu­tional Court, Vo­da­com had “as­so­ci­ated it­self with the dis­hon­ourable con­duct of its for­mer CEO”, reads the judg­ment. “This leaves a sour taste in the mouth. It is not the kind of con­duct to be ex­pected from an eth­i­cal cor­po­rate en­tity.”

VICTORIOUS Kenneth Nkosana Makate

DIS­HON­OURABLE Alan Knott-Craig

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